Question
There is two goods X and Y. Their demand function is following; X=144-Px and Y=250-2Py the production quota is 2X+2Y=80 where cost of production is;
There is two goods X and Y. Their demand function is following;
X=144-Px and Y=250-2Py the production quota is 2X+2Y=80 where cost of production is; C=2 2 + 2 2 + 2 + 70, Now optimizes the profit.
b) Now use the Bordered Hessian method to show that all the optimal values that you find in (a) maximize the profit.
c) Define the significance of Lagrange Multiplier in optimization using this context. What is the other name of Lagrange Multiplier? Please briefly discuss how it will affect a firm's decision in this context?
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Business Statistics For Contemporary Decision Making
Authors: Ken Black
9th edition
978-1-119-3208, 9781119334781, 1119334780, 1119320895, 978-1119320890
